The 7800 was NOT part of the Atari sale to Tramiels.
>>>>>>>>>>>>>There wasn't a transition, they were completely different companies. Jack Tramiel simply bought the Consumer Division of Atari Inc., not the entire company. He then folded that in to his company, Tramel Technology Ltd., which he then renamed Atari Corporation. Likewise, he bought the Consumer related IP, consumer related facilities (corporate offices and buildings related to Consumer, manufacturing and warehouses related to Consumer) and the distribution network. The people were not part of the deal. Hence they did interviews of all the Consumer Division related people to see who they wanted to keep (and did interviews of some of the people at Coin to try and get them to come to the new company as well). Most were related to daily operations (one of the advanced research that were on the 68000 console project at Atari Inc. was simply hired on to help run Atari Corp.'s mainframe for instance), and the rest chiefly towards retail operations (since he planned on having the company survive in the immediate term on the large backstock of product that came in the purchase) and computer design operations (for what became the ST). Almost everyone from the console development area was not hired over or went away on their own. The issue of why there was a lot of confusion amongst the Atari Inc. employees is because the buyout happened so suddenly and with no normal "transition period" for employees. They came back from the July 4th extended vacations to find out about the purcase. They thought they were working for Jack now and that Jack owned "Atari". Likewise they thought they were being interviewed to see if they'd be fired. They were not. They were being interviewed to see if they would be *hired* to Jack's company. Atari Inc. still existed at that point (in fact it existed on paper for another good year to deal with legal issues), but was being wound down as the coin-op operations were split to another company (Atari Games) and the rest sold off or simply closed down.
When Jack finally settled with Warner and GCC over the 7800 development payment, he had to completely start up a new game division, which is where Mike Katz came in. He started up the 7800 again that October '85 and finally released the cost reduced 2600 (which was originally supposed to be the stopgap last model of the 2600 under Atari Inc.) He was against the XEGS being released when Jack pushed for it in '87, but not for any of the reasons you claim. It was because he didn't consider it to have any "hot" launch titles, which was true. <<<<<<<<<<<<<<<<<<
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